CBK Rebuts DP Gachagua’s Allegation That the Nation Lacks Foreign Exchange Reserves

In response to allegations made by Kenya’s deputy president, Rigathi Gachagua, that the nation has sufficient foreign exchange reserves to import oil, the Central Bank of Kenya (CBK) has issued a statement.
Gachagua asserted in an interview with Citizen TV on Sunday night that the country’s financial situation is so bad that there are no reserves to buy oil from other countries.

“Tumekosa maneno ya Foreign Exchange hata jana pale katika benki kuu hakukuwa na zile pesa za kigeni za kutosha kuagiza mafuta kutoka nchi za nje (We have lacked foreign exchange, even yesterday there was no enough forex at Central Bank to buy oil from foreign countries),” Gachagua said.

Gachagua’s remarks were quickly disavowed by CBK, who said that they do not provide the necessary foreign exchange and that all foreign exchange for private transactions is obtained via commercial banks.

“CBK does not supply foreign exchange for transactions other than for the National Government (i.e., government’s own imports or debt service payments) or CBK’s operations. Oil importers, therefore, obtain their requisite foreign exchange from the commercial banks and not CBK,” wrote CBK in a statement.

They also added that CBK’s foreign exchange cover is still sufficient and that they will keep protecting foreign exchange markets from shocks.

“The Central Bank of Kenya Act (Section 26) requires that CBK “at all times use its best endeavors to maintain a reserve of external assets at an aggregate amount of not less than the value of four months’ imports as recorded and averaged for the last three preceding years.” This stood at 4.64 months of imports as at September 26, 2022,” said CBK.

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